The spat erupted when a seemingly peeved Bloomberg, who has warned that a regulatory frenzy could slice into the city's tax base, said he was not alerted to Obama's pitch at Cooper Union.

Advertisement

"Well, I just saw on the blogs that he was coming, so I haven't talked to anybody in the White House," Bloomberg told reporters at an event in the Bronx at about 10:30 a.m.

Hizzoner reiterated his concern that overregulation could put New York's financial titans at a competitive disadvantage - and leave the city with less revenue.

"My concern is for our police officers and firefighters and teachers and everybody else," he said.

"They get paid by the taxes that the financial industry, as well as many others...in this city [pay], so my concern is that New York is not disadvantaged."

That line of thinking didn't sit well with the White House - even before federal regulators last week accused banking giant Goldman Sachs of fraud in a $1 billion scheme.

Obama spokesman Robert Gibbs suggested the real worry for New York should be a repeat of the nation's most recent financial meltdown, which forced U.S. taxpayers to bail out numerous big banks and insurers.

"We just have to make sure that rules are in place so that the taxpayers...don't get handed a bill when a group of individuals decide to take some risky actions," Gibbs said.

As if to underscore the message, Obama later fired off a tweet: "It's time for Wall Street reform."

Aides to Bloomberg later insisted that Hizzoner - who last tangled with the White House over health care reform - was not mad about being left in the dark.

After day-long speculation about whether Bloomberg would even be invited to the speech, the mayor's office said he was finally invited in a phone call from the White House last night .

The back-and-forth came as Wall Street seemed to steady itself - at least momentarily - in the wake of Friday's announcement that the Securities and Exchange Commission sued Goldman Sachs on civil fraud charges.

There could well be more shoes to drop: Citigroup revealed it is being probed by the SEC as part of an "industrywide investigation into a wide range of subprime-related issues."

Goldman's shares traded up 1.6% on rumors the financial giant would announce big quarterly profits today, as well as news that the SEC vote to investigate the firm was a narrow 3 to 2.

Goldman is charged with letting a hedge fund client, John Paulson, set up - and then secretly bet against - a newfangled investment fund backed by subprime mortgage loans.

Advertisement

The SEC charged Goldman helped create a fund that was designed to fail - giving Paulson a $1 billion payday when it did.

Fabrice Tourre, 31, the self-described "Fabulous Fab" who is the only Goldman staffer named in the suit, yesterday made a "personal" decision to take time off, a Goldman spokeswoman said.

The SEC complaint included

e-mails in which London-based Tourre appeared to exult in the products he was creating.

"Only potential survivor, the fabulous Fab standing in the middle of all these complex, highly leveraged, exotic trades he created, without necessarily understanding all the implications of those monstruosities [sic]," he wrote in one in January 2007.